France’s Socialist Presidential Candidate Francois Hollande

May 4 (Bloomberg) — Philippe D’Arvisenet, chief global economist at BNP Paribas SA, talks about the French elections and the outlook for the economy.
He speaks in Paris with David Tweed on Bloomberg Television’s “Last Word.” (Source: Bloomberg)

May 4 (Bloomberg) — French President Nicolas Sarkozy and Socialist Francois Hollande wrap up their campaigns today with the challenger seeking to become the first candidate to oust an incumbent in three decades. (Source: Bloomberg)

May 4 (Bloomberg) — Yves-Marie Cann, research director at polling company CSA, discusses French presidential candidate Francois Hollande’s lead over Nicolas Sarkozy in opinion polls.
He speaks in Paris with David Tweed on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

French President Nicolas Sarkozy and
Socialist Francois Hollande wrapped up their campaigns urging
their supporters to turn out as the challenger’s lead narrowed.

The final daily tracking survey before the vote tomorrow
showed Sarkozy narrowed Hollande’s lead to 52 percent to 48
percent, according to the pollster Ifop. No margin of error was
provided. Five polls published the past two days indicated
Sarkozy gaining after the May 2 televised debate.

“Even with the gap narrowing in the final campaign day, it
will be very, very complicated for Sarkozy to win,” Leendert de Voogd, Brussels-based global head for politics at research firm
TNS, said in an interview. “Never in the past eight
presidential elections has a candidate been able to overturn the
vote in the last three days. There is one chance out of 10 to
see a Sarkozy victory.”

With joblessness at a 12-year high and the national debt at
a record level, Sarkozy and Hollande have focused their battle
on the economy and Europe’s debt crisis. Sarkozy gains have
resulted from appeals to followers of the anti-immigrant
National Front party.

In his last rally yesterday, Sarkozy stuck to themes that
he’s favored throughout the campaign: control of immigration,
respect for authority, the Christian roots of France, and the
value of work.

“If we don’t deal with the issues that concern the French,
then others will talk in our place,” Sarkozy said in Sables
d’Olonne on the Atlantic coast. “The next time it won’t be 6.5
million voting for the National Front, but many more.”

In the industrial town of Forbach, in the east, the
Socialist highlighted a government bond sale this week that
raised almost $10 billion at declining borrowing costs.

Hollande’s Yield

“Two days before the elections, France borrows 10-year
debt at the lowest rates in months,” Hollande told a crowd on
the town’s market square. “Markets aren’t scared of us.” He
ended his campaign in Perigueux in the southwest.

Voters now favor Hollande over Sarkozy by a margin of 53.5-
to-46.5 percent according to TNS Sofres and by a margin of 52.5-
to-47.5 percent according to both BVA and Ipsos polling
companies.

The polls “show a tightening, so I say to voters, don’t
let others decide for you,” Hollande said on RTL radio. “I
would like an ample victory. If the French are to choose, they
should do so clearly and massively.”

Mitterrand’s Successor

A victory for Hollande would make him France’s first
Socialist leader since Francois Mitterrand in 1995. Mitterrand
was the only candidate to vanquish an incumbent president,
defeating Valery Giscard d’Estaing in 1981.

Voters get a one-day break from politics today before they
cast their ballots to select a head of state for the next five
years.

The French election coincides with other ballots this
weekend that have the potential to reshape European political
map. Recession-weary Greeks will pick a new government. Local
elections will test Italy’s political pulse, and voters in a
northern German state may deal a symbolic blow to Merkel.

Hollande has repeatedly called for a re-negotiation of the
budget pact agreed by European leaders in March, saying it needs
to place more emphasis on growth and calling for the European
Investment Bank to be given a greater role in spurring public
spending. He has rejected a Sarkozy plan to raise sales taxes to
fund a cut in payroll charges as part of an effort to make
France more competitive.

German Message

German Finance Minister Wolfgang Schaeuble indicated
yesterday his expectation that he will have a new negotiating
partner. A German government spokesman confirmed said that
diplomatic contact had been made with the Hollande camp.

“We’ve told Mister Hollande that the fiscal pact has been
signed and that Europe works along the principle of pacta sunt
servanda,” meaning agreements must be kept, Schaeuble said in a
speech in the western German city of Cologne.

Hollande has pledged to meet France’s deficit reduction
targets this year and next. He intends to do it through raising
taxes by more than he increases spending. He also plans to tax
personal earnings of more than 1 million euros ($1.3 million) at
a rate of 75 percent.

“Are you aware we are in an open world?” Sarkozy asked
Hollande in their confrontation. “There is a difference between
us: you want fewer rich, I want fewer poor.”

The exchange was part of Sarkozy’s effort to vaunt his
economic policy, which includes an increase in France’s
retirement age, tax cuts for business and the sales tax increase
planned for October.

Debt Sale

The combined impact of the measures has kept French
borrowing costs near record lows, with the 10-year bond yields
at about 3 percent, he said. That’s more than Germany pays,
though it’s half of Spain’s rate.

After anti-immigration candidate Marine Le Pen won more
than 6 million votes in the first round, a record that placed
her third among the candidates after Hollande and Sarkozy, the
incumbent president sought to appeal to her voters.

In the debate, when Hollande asked Sarkozy why he equated
all foreigners with Muslims, Sarkozy shot back that it was
“denying reality” to suggest that most migrants didn’t come
from North Africa. “Muslims are treated better in France than
Christians are in the Orient,” he said.

Such remarks may have alienated centrist voters. Francois Bayrou, the self-described centrist at the head of the Modem
party that got 9.1 percent of the votes in the first round, said
that he will vote for Hollande.

While Sarkozy’s nod to Le Pen supporters may cost him other
centrist voters, his momentum in polls suggest the nationalist
appeals are broader than some pollsters anticipated.

“Watch Friday’s polls closely,” said Dominique Reynie, a
senior research at Paris’s Institute of Political Studies. “If
they show another narrowing, then Sarko has a chance. There’s no
reason why the trend wouldn’t continue through the weekend.”

To contact the reporter on this story:
Mark Deen in Paris at
markdeen@bloomberg.net

To contact the editor responsible for this story:
James Hertling at
jhertling@bloomberg.net

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